Potential for Gippsland coal to liquid plant

A new pilot plant to convert brown coal into synthetic oil could be built in Gippsland.

Western Australian company Greenpower Energy says scientific tests found the coal was suitable for use in a coal to liquid plant.

The company's chief executive, John Watt, says coal could be sourced from existing mines and then converted into crude oil.

He says the plant would be more efficient and emit fewer carbon emissions than other coal to liquid plants.

"This is a direct conversion from coal to liquid, it doesn't go through a gasification and then liquefaction process, it goes directly to the liquid and the result of that it's a much lower carbon dioxide," he said.